RBS-NatWest launched a two-year fixed-rate deal at 4.99pc with no fees, while Lloyds brands Halifax and Bank of Scotland offered a rate of 5.19pc on their two-year fixes, with a £995 fee.

Clydesdale and Yorkshire banks immediately trumped those lenders by reducing the rates on their three-year fixed-rate mortgages from 5.49pc to 4.99pc, for those with a 5pc deposit. These products are not part of the Help to Buy scheme.

The scheme is designed to help first-time buyers and existing property owners move up the housing ladder. It allows borrowers with a 5pc deposit to buy property worth up to £600,000.

The Government guarantees up to 15pc of the loan at a cost to the lender, with the aim of allowing the borrower to access cheaper mortgage deals.

Mortgage experts expect the pricing of mortgages for borrowers with a 5pc deposit will become much more competitive in the new year, when other lenders are expected to launch their Help to Buy offerings.